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About Me

Your blog editor is Frank Hurdle. I'm a native of Holly Springs, Mississippi; and a graduate of Ole Miss, B.A. and J.D. I buy and sell rural land and practice law.
My philosophy of life is simple: When society or the free market rewards an activity -- monetarily or through approbation -- then society will get more of that activity. Punish an activity -- through taxation or otherwise -- and you will get less of it. Unfortunately, the geniuses who run this fine country of ours haven't figured this out yet.

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Monday, December 19, 2011

On taxing wealth, Huey Long had it half right

If Huey Long were on the political scene today, chances are I would be dead set against him. He was a despot and a demagogue. And yet, if you look back at some of his proposals, they aren’t so radical at all. In fact, water them down a little and they make darn good sense! Some of Long’s proposals are already law. The credit for Social Security and other New Deal programs belongs to Huey Long, not Franklin Roosevelt. Roosevelt only enacted them in order to take the wind out of Long’s sails, as Long was a serious contender for the 1936 presidential election and was agitating mightily for them. Long’s signature campaign platform was his Share Our Wealth plan. Essentially this plan was designed to whittle down the large estates and help the poor. Long hadn’t done his math, because it really wasn’t going to help the poor that much, but he told one reporter that was a worry for another election. Long’s plan, which I don’t agree with entirely, would have effectively sought to cap both income and wealth. He started out wanting to tax estates of $50 million or more (1933 dollars!) but quickly amended this to estates of $5 million or more. His plan was to cap annual income at $1 million and to progressively tax large estates, so that a $5 million estate would pay a five percent annual estate tax and an estate of $8 million or more would pay an annual estate tax of eight percent. Although I don't agree with the scope of Long's plan, I am surprised that there is essentially no voice in America calling for any taxation on wealth. What voices there are call for a one-time, ruinous tax at the time of death, which is counterproductive. It’s worth noting that Long’s plan really wouldn’t confiscate these people’s wealth, only whittle it down – a death of a thousand cuts, if you will. So what would Long’s plan look like today? A million dollars in 1933 is almost equal to $18 million today. $5 million is almost equal to $80 million. I’m not in favor of capping income at all, but levying a few wealth taxes on estates of more than $80 million – or more than $10 million for that matter – isn’t going to harm anyone. Now let me add that I think high income taxes are always a bad idea. People really will quit working and quit investing. There are a lot of good reasons why we shouldn’t tax income at high rates, no matter how high that income is. But a small annual tax on wealth is another matter. I think Huey Long’s proposed eight percent tax on large estates is too large, but a two percent annual tax on large estates and a three percent tax on mega-estates isn’t going to “confiscate” anyone’s wealth. Make it four percent and you can do away with the death tax altogether. This wealth tax can also be applied to corporations that send their profits overseas. The corporation either has a net worth or not. If it does, tax it. I’m always amused when people like Warren Buffet call for an increase in the income tax. You could raise the income tax to 90 percent and it wouldn’t hurt Buffet, because he has very little income in relation to his wealth. He never sells anything, and thus never has to pay taxes on his profits. But tax his wealth, and suddenly this man will have to pay his fair share, and see if he doesn’t sing a different tune on taxes! Make no mistake, rich people contribute a lot to this country. I am a capitalist through and through. But over the last dozen years or so the moneyed interests have manipulated the system to profit when times are good and to have the taxpayers cover their losses when times are bad. Essentially over the past 10 years there has been a mass confiscation of wealth and income from the American middle class to transfer it to the high end of the upper class. Should we as a society snatch a little back it isn’t “confiscation.” It’s a self-help repossession. Our system is no longer a capitalist system, but a crony capitalist system, where spoils are distributed based on political contributions or racial affiliation. Most schemes to raise taxes do so by hitting the upper middle class while allowing the super-rich to avoid taxes. It’s wrong. If we follow Huey Long’s advice and tax wealth, we tax everyone, and tax everyone fairly. We just don’t need to go overboard while we’re doing it.

A two percent annual tax on large estates and a four percent tax on billion-dollar estates wouldn't confiscate anyone's wealth. It would likely very slowly whittle down some of the big estates, but more important, it would stop the tax-dodging that is going on by the wealthy and big corporations.

I should note that a wealth tax like this one can and should accompany a drastic reduction in income tax rates and a drastic reduction or elimination of the death tax.

Our goal with taxation should be to make them difficult to avoid through changes in behavior (unless we are trying to change behavior) and to keep them relatively low while making sure everyone pays.

As a final note, one of the main functions of government is to protect property. Obviously the people who benefit most from this service are the Bill Gateses and Warren Buffets of the world. It's not unreasonable that they should pay a four percent annual fee to have their property protected.

Andersen has a way of "spiking" comments at his blog. That is his right.

I joined him in lauding the work the late British journalist Christopher Hitchens, citing two of his(Hitchens) greatest accomplishments:Nailing the proven holocaust "poseur" to the cross and his leading the efforts by international journalists in freeing David Irving from his Austrian "gulag."

Andersen found "unintentional humor" in my post, citing my reference to Irving's cell, where he was sentenced to serve a three-year prison sentence in a 6'x 8' jail cell for some comment that he had made seventeen years before his arrest, as a "gulag."

When I first heard of Irving's imprisonment, I thought of Ezra Pound's imprisonment in Pisa, Italy following WWII. Pound had made broadcasts critical of FDR and his cabal, and so, became a target of the OSS.

The definitive work on Pound and his trial and confinement at St. Elizabeth's Mental Institution in DC was by the late Eustace Mullins:Ezra Pound:This Difficult Individual. There he underwent clinical shock therapy for his "madness." And only upon the intervention of UN Secretary General Dag Hammarsjold( and poet T.S Eliot) did Ike release Pound for his return to Italy(1958).

Btw, Pound's cellmate at Pisa prison was Emmett Till's father, Louis, who was hanged for the rape of two Italian women and the murder of a third. The account of his hanging can be found in Pound's Pisan Cantos.

That proven holocaust poseur was Irgun member Elie Wiesel. There is no proof that he was at Deir Yassin, Palestine with Menachem Begin and his terrorist Irgun, but there is also growing doubt that he was ever at Auschwitz, Poland.